Demand on electric power grids can vary significantly depending on conditions existing at any given time. For example, demand for power may increase significantly during a hot summer season due to increased use of air conditioning. During periods of varying demand, voltage is maintained within the grid by various types of equipment within the grid, such as voltage regulators and capacitor banks. Frequency is maintained by matching generation with load. When demand exceeds the available supply, the utility must either purchase power from neighboring interconnects or bring additional (possibly less efficient) generation on line.
Bringing resources online to regulate voltage, for example, switching on capacitor banks, and bringing resources online to supply additional power, for example, purchasing power from another source, can be costly and time consuming. Furthermore, in many cases, monitoring and reacting to voltage instability or generation shortfall must be performed manually, often at or near the source of the problem, and thus grid management is neither centrally controlled or automated.